What does Outbound Investment Structuring mean?
Prior approval from Reserve Bank of India is not required to be obtained by an Indian Company under the automatic route in order to set up Joint Venture/Wholly Owned Subsidiary abroad. Below mentioned are included under the automatic route for direct investment:
- Investment must be up to 400% of the net worth
- Valuation requirements in respect of valuation of investment are required to be complied.
- Reserve Bank of India caution list does not include Indian company
- In respect of all overseas investment, Annual Percentage Rate is required to be submitted.
- Some basic conditions must also be fulfilled if the Indian firm is engaged in the provision of financial services
- In addition, foreign companies involved in real estate, and banking transactions needed authorization of Reserve Bank of India.
What are the advantages of Special Purpose Ventures?
- Flexibility in borrowing and corporate restructuring
- Joint Venture Private Equity Funding
- Bilateral Agreements
- Efficiency of Tax
- Ease of entry and exit
- Overseas Listing
What is its importance?
Advantage from exemption in the control of the Special Purpose Entity for dividends and capital gains from downstream transactions under certain terms. Terms essentially include the shareholding structure, the authority of the parent party and the stock of the holding.
Intellectual Property Right Regime
Different deductions exemptions and rewards are accessible in certain countries with respect to Intellectual Property Right assets such as the Patent Box Regime, i.e. A concessional payment for copyright profits in the case of certain IPRs and also a deduction for certain cinematographic movies in the United Kingdom.
Withholding Tax provisions
Withholding tax exemptions on dividends, royalties, and interest
Favorable Holding Company Regime
Lower income tax rates for holding companies under specific holding company regimes.
Thin Capitalization Rules
Companies are assumed to be capitalized in a small way because their capital comprises a larger share of the debt equity. In such a scenario, money repatriation is feasible by claiming a tax deduction to interest on debt.
Main services offered by us include the following services:
- Guidance and support in the structuring, asset structuring and regulatory approval phase of the chosen jurisdiction
- Recommendations on cross-border investment strategies, including recommendations for achieving optimum ownership arrangements for investments in a specific jurisdiction, including the creation of a foreign holding company, a global sales agency, etc.
- Assistance in finalizing and evaluating investors, joint ventures and other corporate contracts or transactions from taxation point of view
- Identify and optimize tax and financial incentives, like making tax rulings in the jurisdiction of preference.
- Recommendation on tax credit claims in India and also on the consequences of tax treaties
- Facilitate in securing permits from the Reserve Bank of India and the regulatory authorities.